Financial statements - Mondi

Notes to the combined and
consolidated financial statements
continued
for the year ended 31 December 2010
20 Borrowings (continued)
Financing facilities
Group liquidity is provided through a range of committed debt facilities which are in excess of the Group’s short-term needs.
The principal loan arrangements in place include the following:
E1.55 billion Syndicated Revolving Credit Facility (UKRCF)
The UKRCF is a five year multi-currency revolving credit facility which was signed on 22 June 2007. This facility was initially drawn
down to refinance existing debt obligations outstanding to the Anglo American plc group prior to demerger. Interest is charged
on the balance outstanding at a market-related rate linked to LIBOR. The Group uses interest rate swaps to limit its exposure
to adverse movements in LIBOR (see note 37).
E500 million Eurobond
Mondi Finance plc launched its inaugural publicly traded bond, guaranteed by Mondi plc, on 26 March 2010. The E500 million
bond, which matures on 3 April 2017, was issued at a discount of E5.63 million and pays a fixed coupon of 5.75% per annum.
The bond contains a coupon step up clause whereby the coupon will be increased by 1.25% per annum whilst Mondi fails to
maintain at least one investment grade credit rating from either Moody’s or Standard & Poor’s. Mondi’s credit ratings, which have
remained unchanged since first published in March 2010, were BB+ (Standard & Poor’s) and Baa3 (Moody’s). The Moody’s credit
rating is investment grade.
E160 million Export Credit Agency Facility (ECAF)
The ECAF is used to part finance expansionary capital expenditure in Russia. The facility has an amortising repayment until 2020
and interest is charged on the balance outstanding at a market-related rate linked to LIBOR.
PLN474 million European Investment Bank Facility (EIBF)
The EIBF is used to part finance expansionary capital expenditure at Mondi ´Swiecie in Poland. The facility has an amortising
repayment until 2017 and interest is charged at a market-related rate linked to WIBOR.
In addition to the facilities above, the Group has committed facilities amounting to ZAR2.7 billion in South Africa.
The Group’s borrowings as at 31 December are analysed by nature and source currency as follows:
Non-interest
Floating rate Fixed rate bearing Total
2010/E million borrowings borrowings borrowings carrying value Fair value
Euro 262 643 2 907 935
South African rand 367 1 14 382 382
Pounds sterling 13 – – 13 13
US dollar – 5 – 5 5
Polish zloty 119 – – 119 119
Turkish lira 13 – – 13 13
Other currencies 2 6 – 8 8
Carrying value 776 655 16 1,447
Fair value 777 682 16 1,475
114 Annual report and accounts 2010